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Posted about 3 years ago

Trash Talk Expert: First Duplex Purchase

I have always been good at birddogging for deals. I loved Gary Vee's Trash talk where he goes to garage sales and looks stuff up on ebay and buys them resell them. Being a football coach and traveling from city to city. Sometimes, if I had time, I would stop at a garage sale and do just that. I enjoyed the excitement of it and found some nice items to flip. I also sold a lot on Facebook Marketplace so when it came to talking and negoitating with strangers I had gotten a little practice at it. 

I did talk to an agent and looked at a few properties but at the time I did not think they were in my wheelhouse or the criteria I was looking for. I was not afraid to drive for dollars or call people up so that is what I started doing. 

Having grown up on the rural south side of Waterloo, IA. I knew that area well. The path of progress in the city is heading that way albeit pretty slowly. I knew this was somewhat of an unknown area for other investors and I loved the school district. The elementary school is the newest in the district. For these reasons I started looking for properties in this area.

There is a string of 3 duplexes on a gravel road that backed up to my elementary school. It has since been torn down in favor of the new one across the street. This now leaves a large open field behind those duplexes. It is one of the most peaceful places I have been. Many years ago one of those duplexes was for sale and my uncle was looking at buying it. He never made a move but I always thought they were in such a great area. 

I learned how to look up the tax assessor website and found the name of the people that owned those three duplexes. I had trouble getting ahold of 2 of them which left 1. The only reason I could get ahold of him was I found he owned a company in town. I called the company and a man answered. 

"Is Phil there?" 

"No, who is this?"

"My name is Jared Hottle and I love the duplex he owns south of town and was wondering if he ever thought of selling it"

"Oh! Well I am Phil's son and I think I may have went to school with your uncle. I will let him know you are interested."

"okay sounds good talk to you later"

Thinking I would never hear back I hung up the phone. 

Flash forward 2 months. I get a call from a random number. I answer. It is Phil. He just went down to the business he retired from and saw a note that he was suppose to call me about his duplex. l said yes I am from the area and love that area and would love to buy it. He said he never considered selling it until recently because of his health wasn't the greatest. Naturally, I asked what he wanted for it and he said the recent tax assessement had it at 131,000 and that is what he wanted. My jaw hit the floor as I thought he would of wanted around 160-175k. I said I for sure wanted it if he wanted to sell. He said he needed to tell one guy he knew about it since he always said if he sold it he would let him know. I said okay and hoped to hear from him soon.

A few days later I was driving by and saw a for rent sign in the yard of the duplex next to the one I was looking at buying. I called to see what he was renting it for and he said 800 a month. (he also said he wasn't interested in selling. I did ask people, lol)

Phil was renting his properties for $600 a month which I knew was very low just did not know it was that low. I knew the biggest value add was simply raising rents knowing it was a high demand area. 

Phil called a few days later and said if I want it let him know. I told him I would like to walk through the property and we scheduled a time to do so. Having renters in it, he wanted to be discrete and I agreed.

It was a great duplex. Well cared for inside, and although advertised as a 2 bed, 1 bath. He had a toilet, shower and sink in the utility room in the basement and had framed out 2 rooms. I believe with an egress window and a few interior doors it could be a 3 bed 2 bath. I told him I wanted it and I would send him a purchase agreement. 

I had my friend, who is a lawyer, draw up a purchase agreement and sent it over for 131k and Phil signed it. I was 45 days away from my first duplex purchase. 

Having alot of cash reserves but no current W2. I asked my dad to cosign with me. Although, it is not what he wanted to do he agreed knowing I would be a good steward of the property and loan. And since I was putting all the cash in, nothing was really coming from him. Because of his great bankability. I was able to get a 30-year 3% interest rate on a non-occupied investment property with 25% down. 

I survived the 1st year on the $600 a month rents and have now raised rents to 750 and 800. The property is doing great. I mow it every week and I just love being out there. My grandpa is buried up the gravel road behind the duplex and my dad told me he is going to retire there. I guess that forces my hand as a buy and hold investor lol. 

Learning: skiptrace, prospecting, tiktok

Need: Brr deal in Iowa, USDA multi education, people looking to cash flow in Eastern Iowa



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